By Jean-Paul McDonald
Agriculture's heartbeat seems to have gotten stronger in October, with the Purdue/CME Group Ag Economy Barometer taking a 4-point leap forward to a reading of 110. The upturn is a composite result of happier times on the farm now and a sunnier outlook for the days to come.
October's sunny disposition comes against a backdrop of USDA forecasts predicting a dimmer net farm income in the coming year. Yet, the farmers beg to differ, at least for now, their Financial Performance Index rose to its peak value since spring. It appears that better-than-expected yields in the Corn Belt and a slight uptick in corn prices have farmers bucking the gloomy income trend.
Contrasting the cheer in earnings, the readiness to spend on farm expansion has dampened, reflecting in a decreased Farm Capital Investment Index. A strong majority suggest it's not the season for big-ticket purchases, with interest rate hikes as the main deterrent.
The soil underfoot also plays a part in farm economics, with near-term farmland value expectations holding steady and a growing number of farmers betting on a rise in the next five years. The driving forces? Non-farm investment interest and the specter of inflation.
Farmland may be where the crops grow, but the strategies above ground are evolving. A quarter of the surveyed corn and soybean growers have already rolled out operational changes to address climate pattern shifts. From conservation tillage to drought-resistant crops, farmers are showing their adaptable spirit.
The data brought to the table by the Center for Commercial Agriculture and the CME Group offers a window into the thinking and planning that define modern farming—a sector that's as dynamic as it is essential.